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Nationwide Injunction Blocks DOL’s New Overtime Rule

November 29, 2016

Last week, a federal district court in Texas enjoined the implementation of the U.S. Department of Labor’s new overtime rule, which raises the minimum salary for employees to be exempt from the Fair Labor Standards Act’s (FLSA’s) overtime requirements.  The court concluded that the DOL may have overreached with the rule in light of FLSA’s overtime exemptions, which are defined by an employee’s executive, administrative, or professional duties, rather than by a minimum salary.

As a result of the decision, it appears that employers do not have to make any changes by the current December 1, 2016 deadline.  However, the Texas decision might be appealed and may not be the final say on the DOL rule.  On its website, the Department of Labor states that it remains “confident in the legality of all aspects of the rule” and that it is “currently considering all of our legal options.”  Of course, the Department of Labor’s position may change with the incoming administration, which may abandon or reverse the new rule.

Affected employers will need to decide whether to proceed with, discontinue, or postpone changes to overtime policies and procedures (especially in the event that changes already have been announced to employees), pending an ultimate determination on the fate of the new overtime rule.

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